Europe’s foodtech ecosystem has remained robust regardless of Covid-19 — however it hasn’t precisely boomed.
In 2020, European foodtech startups raised €2.7bn — precisely the identical quantity as in 2019, in line with a new report from Paris-based DigitalFoodLab shared solely with Sifted.
So what’s behind this plateau in funding? Which startups nabbed the most important funding rounds? The place’s the funding coming from? And the way has the European foodtech ecosystem modified because of the Covid-19 disaster?
Let’s take an European foodtech tour.
Europe gained two new foodtech unicorns
Though foodtech startups had a tough time when the pandemic hit in March 2020 — particularly when eating places needed to shut for security causes — they rapidly tailored their affords to the brand new at-home working and residing life-style.
One of many winners of the pandemic had been meal equipment corporations just like the UK’s Gousto, which reached a £1bn valuation in November 2020.
In July 2020, the UK’s darkish kitchen rental startup Karma Kitchen secured the largest foodtech funding round in Europe of €291m. The second and third place had been taken by France’s insect-food startup Ynsect (€202m) and Swedish oat-based product firm Oatly (€180m), which additionally reached unicorn standing final yr.
Funding in meals supply dipped whereas funding for agtech and meals science shot up
In 2018 and 2019, the most important rounds had been principally secured by meals supply startups such because the UK’s Deliveroo, Spain’s Glovo and the Netherlands’ Picnic. However in 2020 the sector represented solely 21% of the whole foodtech funding in Europe, down from 59% in 2019.
Though meals supply startups Wolt and HungryPanda raised vital rounds, meals startups in agriculture and different proteins like Infarm, Ynsect and Innovafeed overtook them by way of funding raised final yr.
Funding in different protein startups elevated by 178%.
What’s extra, funding in different protein startups elevated by 178% — from €203m in 2019 to €566m in 2020. The sector recorded essentially the most vital progress in European foodtech.
Massive corporates performed an energetic function in European foodtech
Regardless of Covid-19, 2020 noticed a rising variety of offers, collaborations and acquisitions between large corps and startups, in line with the report.
Dealroom’s database exhibits that CVC funds plugged €223m into foodtech startups — that’s 8% of the whole European foodtech funding in 2020.
A number of of the highest 10 foodtech rounds of 2020, similar to Infarm’s $170m Collection C, included company buyers.
Lively company buyers included Germany’s Mitsubishi Chemical, which invested in cell-based meat Mosa Meat and milk-based biodegradable packaging Lactips — and France’s SEB, which backed filtered bottled water Castalie and retail collaboration platform Alkemics.
The Covid-19 disaster didn’t cease meals giants from taking on small gamers both: the most important disclosed company deal was Germany’s Dr Oetker buying beverage supply startup Flaschenpost for €1bn.
In the meantime, Swiss meals big Nestlé went on a worldwide acquisition spree final yr: in Europe, it acquired the UK’s wholesome meal startups Freshly and Aware Chef and the Swiss Aimmune Therapeutics, which focuses on meals allergy therapies.
European foodtech startups raised extra and bigger funding rounds
Final yr, the variety of foodtech offers in Europe reached a file 480 and the median deal measurement went as much as €1.2m — doubling since 2017. 2020 additionally recorded a number of giant Collection A rounds, similar to speedy grocery supply startup Gorillas’ $44m increase, animal free protein product The Protein Brewery’s €22m increase and insect-based animal feed firm Tebrio’s $54m increase.
Out of the €2.7bn raised, 30% got here from Collection A offers and 53% was raised by seed-stage startups — a shift from the 2014-2018 interval when 70% of European foodtech rounds had been at seed stage.
Europe’s foodtech ecosystem stays a small participant globally
However Europe’s foodtech funding solely accounts for 12% of worldwide funding — down from 15.6% in 2019.
Funding in Europe additionally stagnated in 2020, however grew 28% globally, led by the US, China and India, because the previous continent tends to have fewer offers over $200m.
“Europe is extra difficult; internationalisation is de facto advanced with many tiny markets to overcome one after the opposite.”
“The [European] ecosystem began later and therefore it nonetheless requires extra time to generate such large ventures,” explains Matthieu Vincent, cofounder of DigitalFoodLab. “Plus, Europe is extra difficult; internationalisation is de facto advanced with many tiny markets to overcome one after the opposite.”
The UK leads however France is catching up
Final yr, foodtech startups within the UK raised essentially the most — €634m — though that was lower than the €749m raised in 2019.
Foodtech funding within the UK has at all times been dominated by outsized rounds.
France is quick catching up with a whopping €600m raised in 2020, up from €400m in 2019. It has essentially the most startups in prime 10 European foodtech offers of 2020 — together with two startups securing over €100m funding rounds.
Germany remained in third place with a slight funding improve to €331m.
Fuelled by Oatly’s €153m’s spherical, Sweden additionally noticed a significant bump in foodtech funding from €157m in 2019 to €264m in 2020.
The Nordics have gotten a foodtech hub
The Nordics secured a file €425m in foodtech funding in 2020 — 3.5 occasions greater than in 2018. Sweden accounts for 62% of capital raised within the area, adopted by Finland (28%).
Many Nordic foodtech startups made headlines in 2020, from Danish vegetarian and vegan meal supply Easy Feast’s €40m fundraise and Denmark’s Mosa Meat’s $55m fundraise to Finnish Photo voltaic Meals product, which makes food out air.
Norway has taken the lead in sustainable aquaculture and fishing tech in Europe and globally, in line with Katapult Ocean’s 2020 oceantech report — and is residence to startups like fish feeding optimisation CageEye and marine monitoring tools and software program Innomar.
What’s subsequent for European foodtech?
One main pattern that has been making waves this yr is the rise of on-demand grocery supply startups — a sector that’s already produced two unicorn startups and raised $821m in the first quarter of 2021, in line with Dealroom.
DigitalFoodLab additionally expects main developments in different meals together with insect-based merchandise and different proteins.
Cecile Bussy is Sifted’s social media journalist. She tweets from @CecileBussy